DOJ Settles Airline Antitrust

The U.S. Justice Department agreed to settle with American Airlines and US Airways, ending the government’s antitrust lawsuit trying to block a merger creating the world's largest airline. The case was headed to trial this month in federal court and the parties previously agreed to a mediator suggested by the court. The Justice Department maintained the planned merger would create a monopoly, thereby reducing competition and leading to higher fares. The settlement calls for certain slots to be divested in major cities, including Boston, New York, Chicago, Dallas, Miami and Los Angeles. U.S. District Judge Kollar-Kotelly, who presided over the Microsoft antitrust case, is overseeing the litigation and must still approve the settlement. American, which has been in bankruptcy, will now exit court protection by merging with US Airways. The companies reportedly expect the merger to generate more than $1 billion in annual net synergies beginning in 2015. The merger will likely close in December, subject to the approval of the settlement by the U.S. Bankruptcy Court. See story here-- http://fxn.ws/1gGczKR

Airline Antitrust Mediation

The U.S. Justice Department agreed to go to mediation along with American Airlines and US Airways to try and resolve the government’s lawsuit seeking to block the proposed merger of the two airlines. The case is headed to trial this month in federal court. The parties agreed to a mediator “suggested by the court,” which is a bit unusual. The Justice Department contends the planned merger would create the world’s largest airline, thereby reducing competition and leading to higher fares. U.S. District Judge Colleen Kollar-Kotelly, who presided over the Microsoft antitrust case, is overseeing the litigation and has said in prior orders that she encourages the use of alternative dispute resolution. Though American has been in bankruptcy for two years, the parent company AMR was set to exit court protection by merging with US Airways when the federal government and a group of states sued to block the deal. If the U.S. prevails in stopping the merger, it has been reported that re-organization will have to start anew, causing disruption among creditors. See more at http://bit.ly/1axsR2f and in case 13-cv-01236 U.S. v. US Airways Group, Inc., U.S. District Court for the District of Columbia.